One of the government's new city academies is "failing to give its pupils an acceptable standard of education" inspectors have said.
The Unity City Academy replaced two failing schools
Ofsted said Unity City Academy, Middlesbrough - which opened in 2002 - needed "special measures".
Leadership, financial management, standards of teaching and learning, attendance, punctuality and behaviour were all found to be sub-standard.
The academy said a new management team was now tackling the issues identified.
The Ofsted report said Unity City Academy had faced many problems, including uniting pupils from two previously struggling schools, a delay in moving to its new building and difficulties in recruiting staff.
A third of the teachers are newly qualified, or unqualified graduate trainees.
"Standards have shown no overall improvement when compared with those of the predecessor schools"
"In too many lessons a significant minority impeded the progress of others through persistently disruptive behaviour."
"In too many lessons. including some that were satisfactory in other respects, the expectations of the pupils were far too low."
"The leadership of the academy is fragile - many of the senior and middle managers are inexperienced ..."
"The academy does not currently have the capacity to bring about the necessary improvement"
Members of the NASUWT teachers' union at the school are threatening to strike over job cuts and new contracts.
The Ofsted report said that on any given day as many as a third of the teachers did not turn up.
All this had had "a detrimental effect on the pupils' learning, attitudes and behaviour and standards".
Last year only 17% got the equivalent of five good GCSEs, compared to the England average of 53.7%.
The first principal left last October and three other senior managers left at the end of last term.
Finance had been "a major difficulty, with the academy heading for a very substantial deficit" though the board of trustees now had this under control.
Pupils' attitudes and behaviour were unsatisfactory.
"The quality of the teaching is poor overall, although there are individual examples of good, very good and excellent teaching."
Many of the staff were strongly committed to the pupils and persevered "despite, at times, overwhelming pressures", Ofsted said.
But it concluded: "The academy does not currently have the capacity to bring about the necessary improvement, despite the strong contribution of many individuals."
In a statement, Unity, which is sponsored by support services company Amey, accepted Ofsted's findings.
It said they largely reflected its own identification of areas needing improvement, which it had begun to tackle.
As part of a recovery plan Unity is to be in a federation with another, successful local school: Macmillan College.
The Department for Education and Skills said this would bring "valuable benefits in leadership and management, and a plan to raise standards and tackle weakness" - with significant investment in several key areas.
The department was confident it would begin to see improvements at Unity as at other academies.
But city academies are supposed to be independent.
The general secretary of the National Union of Teachers, Steve Sinnott, said some would improve their results - by changing their intake of pupils and focusing on "aspirational" parents.
But it made no sense to separate struggling schools in deprived areas from "the community of schools" and the usual support mechanisms.
Call for a pause
The government is committed to having 200 city academies. The 19 so far have each inherited challenging problems and, supporters argue, none has had long to prove itself.
But a report from the Commons' education select committee has called on ministers to scale down the programme until the schools were shown to be cost-effective.
And Liberal Democrat spokesman Ed Davey said the Unity report raised serious questions about the whole project.
"No-one can deny the challenging situations faced by teachers in our inner cities but it is not clear that an academy offers all the answers," he said.
Conservative spokesman David Cameron said: "While we support the principles underlying city academies, until head teachers are given more control over admissions, curriculum, discipline and expulsions, they will find it hard to make improvements."
A separate Ofsted report on the other city academy in Middlesbrough has mixed messages.
It said the principal of the King's Academy, Nigel McQuoid, provided very good, "inspirational" leadership and staff had achieved "notable success" in establishing a positive climate.
But this "has not been matched by a similar transformation in the quality of teaching and learning".
In five of the 30 lessons inspectors saw teaching was unsatisfactory and in seven others the strengths "only marginally outweighed the weaknesses".
But pupils' attitudes and behaviour were rarely less than satisfactory and sometimes exemplary. Attendance, though low, was improving.
City academies show promise however I doubt 200 will make a difference with education needing extra funding throughout. I have always thought Mr. Blair takes the easy option and city academies are no exception. He raised tuition fees because he simply could not be bothered to investigate alternative funding arrangements. 200 city academies will be fine for the 12000 pupils who attend them, but what about the other 2 million who don't attend them?
Peter Morphew, Dorchester
They are not a good idea as they are run by people who set their own agenda. The one in the article is controlled by Peter Vardy who has imposed his religious beliefs on the curriculum. Also the cost to people like Vardy is nothing and the running costs are still met by the government.
Adrian Cannon, Edinburgh Scotland
Beautiful buildings mean nothing when staff are tied up in bureaucracy when trying to deal with disruptive pupils and their parents, who will challenge every decision made. Government popularity takes precedence over common sense and the ability to bring about effective change.
Mike Sullivan, Merthyr Tydfil
I know a little about the design and construction of Unity City Academy, and it's a fantastic building. But this just emphasises the fact that it is the quality of the teaching staff that makes or breaks a school. Teaching, like accountancy or the law, should be a profession that talented and dynamic graduates aspire to. We should attract the best and pay them a professional's salary instead of wasting the money on expensive buildings.
David Taylor, Barnstaple
Academies are a very good idea and given the right management and ethos can be extremely successful. The problem lies in the fact that staff from failing schools transfer over. It would be more logical to hire an entirely new staff who have the vision and motivation to make the academy work.
What a simpleton Mr. Blair must be to have thought that some flashy architecture and a truckload of spin would be enough to tackle such a complex longstanding national socio-economic problem. Why pour a hideous amount of money into such a highly improbable solution?
Amanda Lay, Colchester, England
It seems as though anyone with wacky ideas and a bit of money can set up a city academy. Look at Emmanuel College in Gateshead; the car dealer Sir Peter Vardy has contributed £2 million to teach creationism. The taxpayer contributes £20 million plus running costs in perpetuity, yet has no say in preventing this rubbish polluting the children's minds.
Stewart Ware, London, England
I fundamentally do not believe that trying to run a school like a commercial concern can be good for education. The city academy project smacks of re-branding and spin. What troubled schools need is not management teams and mission statements - they need a good head teacher with sufficient resources and support to make the necessary changes to improve standards. What everyone seems to forget is that this kind of reform takes time and cannot be accelerated to fit in with the political timetable.
Kate Allen, Bristol, England